31 – OTHER PERSONAL TAX CREDITS

🏡 Home Buyers’ Amount (First-Time Home Buyer Credit)
🌱 Climate Action Incentive (CAI) — What New Tax Preparers Need to Know
🚒 Volunteer Firefighters and Search & Rescue Volunteers Tax Credit

🏡 Home Buyers’ Amount (First-Time Home Buyer Credit)

If you buy your first home in Canada, the government gives you a tax credit to help with your costs. This is called the Home Buyers’ Amount.

✅ What Is the Home Buyers’ Amount?

It is a non-refundable tax credit for first-time home buyers.

Maximum claim amount: $10,000
Tax savings it provides: up to $1,500 (because $10,000 × 15% federal credit rate = $1,500)

This amount applies to 2022 and future tax years.

Before 2022, the credit was only $5,000 (worth $750).

🎯 Who Qualifies?

You may claim this credit if:

✔️ You bought a qualifying home in Canada
✔️ You are a first-time home buyer
✔️ You intend to live in the home within one year of buying it

🧾 What Counts as a First-Time Home Buyer?

You are considered a first-time buyer if:

You did not live in another home you owned in the year of purchase or the 4 previous years

This is sometimes called the 4-year rule.

🏠 What Types of Homes Qualify?

To qualify, the home must be located in Canada and can be:

A detached house
Semi-detached or townhome
Condo/apartment unit
Mobile home or modular home

As long as it is eligible to be your principal residence, it qualifies.

♿ Special Rule — Persons With Disabilities

You do not need to be a first-time buyer if:

You purchase a home for someone with a disability (or are a person with a disability yourself), and
The home is suited to their needs and will be their place of residence

This means a caregiver or a person with a disability can still claim the credit even if they owned a home before.

👩‍❤️‍👨 If Two People Buy a Home Together

Couples (spouses or common-law partners) can share the credit, but:

The combined total cannot exceed $10,000
Only one person needs to be a first-time buyer (unless claiming under the disability exception)

Example splits:

One spouse claims $10,000
OR each claims $5,000
OR any other split adding up to $10,000

💡 Key Points to Remember

Rule	Summary
Credit value	$1,500 (based on $10,000 amount)
Must live in the home	Yes, within 1 year of purchase
Location	Must be in Canada
Shared between spouses?	Yes — total max stays $10,000
Disability rule exception	Not required to be first-time buyer

📍 Where Is It Claimed?

On your personal income tax return under the federal non-refundable tax credits section (line changes over years, always under “Home buyers amount”).

(Do not worry about the line number — tax software labels it clearly, and CRA forms list it each year.)

🧠 Simple Example

Jaspreet buys her first condo in 2023.

She claims the full $10,000 Home Buyers’ Amount.

Tax reduction:
$10,000 × 15% = $1,500

✅ Summary

The Home Buyers’ Amount is a great benefit for new homeowners. If you’re buying your first home, don’t miss this credit!

🌱 Climate Action Incentive (CAI) — What New Tax Preparers Need to Know

The Climate Action Incentive (CAI) is a payment the federal government gives to individuals and families to help offset the cost of federal pollution-pricing programs. If you live in a province where the federal carbon tax system applies, you may qualify.

✅ Important Change: Not Claimed on the Tax Return Anymore

Before 2021 tax year:

The CAI was claimed directly on the personal tax return (Schedule 14).
It appeared as a refundable tax credit.

2021 and future years:

It is no longer claimed on the tax return.
It is paid automatically by the CRA as a quarterly benefit, similar to the Canada Child Benefit schedule.

📬 How You Receive the CAI Now

When your tax return is filed:

CRA checks if you’re eligible
CRA automatically issues CAI payments
Payments arrive every quarter

No action is required on the tax return to apply for it.

🌍 Who Is Eligible?

Eligibility depends on your province of residence.
The CAI applies only to provinces under the federal carbon pricing system (for example: Alberta, Saskatchewan, Manitoba, Ontario — subject to government updates).

If you live in one of the participating provinces and file your taxes, you’ll receive the benefit.

👪 What About Children?

Children under 18 increase the benefit amount, but only if they are registered with the CRA.

✅ If already receiving the Canada Child Benefit (CCB) → children are registered ✔️
❗ If not, the parent/guardian must register the child with CRA.

👪 Rural Supplement (10% Increase)

If you live in a rural community, you may receive an additional 10% supplement.
CRA will determine this based on your address when your return is filed.

🧾 Key Notes for Tax Preparers

Rule/Point	Explanation
Not claimed on tax return	✅ Since 2021 onward
How to apply	Just file your tax return — CRA auto-applies
Payment frequency	Quarterly (every 3 months)
Children included?	Yes, if they are registered with CRA
Special increases	+10% for rural residents
Provinces	Only applies in federal carbon-pricing provinces

📅 Transition in 2021

When this change first took effect, some taxpayers received a double payment in the first quarter after their tax return was filed. That was a one-time transition measure.

🎯 Quick Summary

The Climate Action Incentive is still available — it just isn’t claimed on the tax return anymore.
CRA pays it automatically as long as you file your taxes.
Paid quarterly based on family size and province.
Children must be registered with CRA to count.

🚒 Volunteer Firefighters and Search & Rescue Volunteers Tax Credit

Volunteer firefighters and search-and-rescue (S&R) volunteers play vital roles in Canadian communities. The government recognizes this service by offering a non-refundable tax credit to eligible volunteers. As a new tax-preparer you should know how it works—even if you encounter it rarely.

✅ Who Qualifies?

You may qualify if you are a:

Volunteer firefighter or
Volunteer search and rescue team member

And you have performed at least 200 hours of documented volunteer service during the year. (The hours may be combined if someone does both types of service.)

💵 How Much Is the Credit?

For tax years 2024 and onward, the maximum claimable amount is $6,000.
The federal non-refundable tax credit is 15% of that amount.
→ Max federal tax reduction = $6,000 × 15% = $900.
For tax years prior to 2024, the limit was $3,000, so the max federal reduction was $450.

📄 Where to Claim It

There are two separate lines on the federal tax return:

Line 31220 — Volunteer Firefighter Amount
Line 31240 — Search & Rescue Volunteer Amount

If you qualify for both, you could potentially use one line (or split appropriately) but the combined amount cannot exceed the maximum eligible amount.

🔍 Key Points to Remember

It’s a non-refundable credit: It can reduce tax owed but will not create a refund if there is no tax payable.
Document the 200 hours of service: You should have records or verification of volunteer hours.
Combine service types: If someone does both firefighting and search & rescue, the total hours qualify.
Know the year: Since the eligibility amount doubled in 2024, confirm the tax year you’re preparing.
Rare credit: You may not see it often — but when you do, you’ll add value by claiming it correctly.

📝 Example

Alex, a volunteer search & rescue team member, served 210 hours in 2024.

Eligible amount = $6,000
Federal credit = $6,000 × 15% = $900
Alex enters the amount on line 31240 and reduces his federal tax payable by $900 (assuming he owes at least that much tax).

🎯 Final Thoughts for New Preparers

While you might encounter this credit infrequently, knowing how it works sets you apart. When you have a client who volunteers significantly, this tax credit adds value and saves them money. Always check the hours, confirm the year, and ensure the correct line is used.